BOC semi-annual Financial Review out on the wires

  • says these temporary imbalances will stabilize then gradually unwind
  • says overall level of risk to Canadian financial system has decreased to ” elevated” from “high” in june
  • risk from household debt and housing market remain elevated, unch from june but continue to be biggest domestic threats to financial stability
  • housing mkt adj will take some time
  • financial system will be vulnerable to risk during this time
  • expects sustainable credit growth to resume after temporary pulling fwd of housing market dissipates
  • data suggests household-debt to income ratio will remain stable and eventually diminish over the coming years
  • BOC sees lower risk from EU area
  • sees moderate risk from financial behaviour in low-rate environment
  • adds emerging market financial vulnerability as new risk
  • continues to work very closely with other authorities to monitor housing market and household debt

Full report from the BOC here

USDCAD holding above 1.0600 and rallying to 1.0622 on generally better USD sentiment in past few minutes